I consider myself a pretty average Mac user, and I've already been turned off by the last couple rounds of Macs that Apple has shipped. Messing up the one remaining upside, x86 compatibility, would be be the straw that broke the camel's back. They still only have single digit market share in desktop computing, this could be the death blow for their platform.

Sounds about right. They actually already have this setup, the T2 chip in recent macs contains an arm processor which handles some tasks like disk encryption. It could be possible that future OSX versions will leverage that processor for more general purposes.

I wouldn't imagine you'd get a lot of performance boost from the change. You'll see battery life but that assumes they aren't looking to run a crazy number of cores to make it compete with the x86. And they only way that massive core counts help is if the software is designed to utilize them correctly.

Its not that all users are devs. Its that all devs might not be able to make their software work well under that environment.

Current crop of Apple A chips runs circles around almost all Intel chips which they put in the laptops at a fraction of TDP.

I think you will see a lot of performance boost after switching to ARM. If they start on the "low end" then a macbook will be practically on par with a mbp. This might not be useful at first for native development, but I am quite sure that macOS, iOS and web development will be very much possible on these machines - the three domains that Apple cares most about.

Knowing Apple, they would just go for the 'even lighter' approach, and insert a battery half the size of the current-ones...

A battery lifetime of 8 or 12 hours is plenty, and going beyond that isn't that much of a marketable strategy, unless it has to become 24h+ or something. A lower weight approach however would also mean a lower BOM for Apple, and more profit, while being able to shout "1/3rd lighter!" - and that's an easy sell :)